Microsoft 365 E3 vs E5: What Is the Difference?

Last Updated: Jan 12, 2024

Choosing the right Microsoft 365 plan for your organization can significantly impact its productivity, security, and overall efficiency. This article aims to help you make the best choice between Microsoft 365 E3 and E5, two popular plans with differing features and costs. We’ll compare the features, pricing, deployment, migration, and real-life use cases, taking into account your organization’s unique needs and challenges. By the end of this article, you’ll have a clear understanding of which plan can help you unlock your business potential and thrive in the ever-evolving digital landscape.

Feature Comparison

When evaluating Microsoft 365 E3 and E5, it’s crucial to understand the differences in their features. Both plans provide a comprehensive suite of productivity apps, but E5 offers advanced security, compliance, and analytics capabilities that may be essential for certain organizations.

Feature	Microsoft 365 E3	Microsoft 365 E5
Price per user/month (annual commitment)	$35.00	$57.00
Seat Cap	Unlimited	Unlimited
Office Apps	Install Office on 5 devices	Install Office on 5 devices
Office Online	Yes	Yes
Excel Power Query and Power Pivot	Yes	Yes
Sway	Yes	Yes
Infopath	Yes	Yes
Use Office on Remote Desktop	Yes	Yes
Onedrive Storage	Unlimited	Unlimited
Audio-conferencing features	No	Yes
Advanced compliance features	No	Yes
Advanced analytics	No	Yes
Advanced retention policies for email	No	Yes
Advanced Threat Protection	No	Yes
Customer Lockbox	No	Yes
PSTN capabilities (Skype for Business Cloud PBX)	No	Yes

Core productivity apps

Both E3 and E5 offer the core set of productivity apps, including Word, Excel, PowerPoint, OneNote, Outlook, and Teams. These tools help your employees collaborate effectively and efficiently, regardless of their physical location. In addition, both plans include SharePoint, OneDrive, and Exchange for seamless file sharing, storage, and email management.

Security and compliance

Security is a critical concern for any organization, and this is where E5 truly shines. While E3 provides basic security features like multi-factor authentication and data loss prevention, E5 takes security to the next level. With E5, you get advanced threat protection, intelligent security management, and additional compliance features like privileged access management, customer lockbox, and advanced eDiscovery. Microsoft’s Security and Compliance offerings are continually evolving to address emerging threats, making E5 an ideal choice for organizations with heightened security needs.

Advanced analytics and AI

Microsoft 365 E5 also includes advanced analytics and AI tools not available in the E3 plan. Power BI Pro, an interactive data visualization tool, enables your employees to make data-driven decisions. Additionally, E5 offers advanced AI capabilities, such as MyAnalytics and Workplace Analytics, which provide insights into productivity and collaboration trends across your organization. These features can help you optimize your team’s performance and achieve your business objectives more efficiently.

Key takeaway:

• E3 and E5 share the same core productivity apps, making them suitable for organizations looking for reliable collaboration tools.
• E5 provides superior security and compliance features, making it a better choice for organizations with advanced security requirements.
• E5’s advanced analytics and AI tools can empower your organization to make informed decisions and optimize performance.

Pricing Breakdown

Understanding the pricing structure for Microsoft 365 E3 and E5 is crucial for making an informed decision that aligns with your organization’s budget constraints.

Plan	Monthly Cost per User	Annual Cost per User
Microsoft 365 E3	CAD $50.80	CAD $609.60
Microsoft 365 E5	CAD $77.30	CAD $927.60

Prices are in Canadian dollars and do not include the applicable tax. Numbers are accurate as of January 12, 2024. To see the latest pricing, visit the official pricing page.

Microsoft 365 E3 pricing

The E3 plan is priced at CAD $50.80 per user per month, billed annually. This cost includes all core productivity apps, basic security features, and 1 TB of OneDrive storage per user. It’s a cost-effective option for small and medium-sized organizations or those with limited security needs.

Microsoft 365 E5 pricing

The E5 plan comes at a higher price point of CAD $77.30 per user per month, billed annually. While it might seem like a significant jump in cost, the additional features like advanced security, compliance, analytics, and AI capabilities may justify the investment for organizations with complex security requirements or those looking to leverage data-driven insights for decision-making.

Calculating the true cost of ownership

When comparing the pricing of E3 and E5, it’s essential to consider the total cost of ownership (TCO). TCO includes not only the subscription fees but also the cost of implementing:

• additional security measures,
• training,
• and support.

In some cases, the advanced features and tools in the E5 plan can lead to significant cost savings by reducing the need for third-party security solutions or streamlining business processes.

Key takeaway:

• When evaluating the cost of E3 and E5, consider the total cost of ownership, including potential cost savings from advanced features.

Pros & Cons

Microsoft 365 E3

Pros:

• Lower cost per user
• Core productivity apps and collaboration tools
• Basic security features

Cons:

• Limited security and compliance tools
• No advanced analytics and AI features

Microsoft 365 E5

Pros:

• Advanced security and compliance features
• Powerful analytics and AI tools
• Enhanced communication capabilities

Cons:

• Higher cost per user
• Potentially unnecessary features for smaller organizations

Purchasing and Assigning New Licenses in Microsoft 365

Transitioning between Microsoft 365 licenses, such as upgrading from E3 to E5, involves purchasing and assigning new licenses to users in your organization. This section will guide you through the process of acquiring and allocating new licenses, ensuring a smooth and efficient transition.

Purchasing New Licenses

Once you’ve decided on the appropriate licensing plan, you can purchase the required number of new licenses through the Microsoft 365 admin center or directly from Microsoft. If you’re a non-profit organization or an educational institution, be sure to check for eligibility and apply for discounted pricing through Microsoft’s non-profit and education programs.

Assigning Licenses to Users

After acquiring the new licenses, you can assign them to your users through the Microsoft 365 admin center. To do this, follow these steps:

1. Sign in to the Microsoft 365 admin center using your admin credentials.
2. Navigate to the “Users” section, and select “Active users.”
3. Find the user you want to assign a new license to, and click on their name.
4. In the user’s settings, click on the “Licenses and Apps” tab.
5. Check the box next to the new license you want to assign, and click “Save changes.”

It’s important to ensure that the right users receive the appropriate licenses based on their roles and responsibilities within the organization. You can also mix and match licenses to optimize the allocation of resources and provide users with the tools they need to perform their tasks effectively.

Add-ons Available for Microsoft 365 E3 and E5

As we’ve explored the core offerings of Microsoft 365 E3 and E5 plans, it’s important to note that there is a range of add-on services available to further enhance functionality and tailor these services to meet the specific needs of your organization. In this section, we will delve into the various available add-ons, discussing their benefits and how they can be integrated into your existing Microsoft 365 E3 or E5 plan to provide a more customized experience.

Add-on	Description
Audio Conferencing	Allows users to join meetings by phone, in addition to using a computer or mobile device. Included in Office 365 E5 and Microsoft 365 E5.
Azure Information Protection	Provides advanced data protection and classification features. Included in Microsoft 365 E3 and E5.
Calling Plan	Enables users to make and receive phone calls in Microsoft Teams. Requires an additional plan purchase (either Domestic or International) and is included in Office 365 E5 and Microsoft 365 E5.
Exchange Online Plan 2	Provides advanced email and calendar features, including unlimited storage and archiving. Included in Microsoft 365 E3 and E5.
Power Apps	Allows users to create custom business apps without coding. Available as an add-on for Microsoft 365 E3 and E5.
Power Automate	Enables users to automate repetitive tasks and workflows. Available as an add-on for Microsoft 365 E3 and E5.
Power BI Pro	Provides advanced data visualization and business intelligence features. Available as an add-on for Microsoft 365 E3 and E5.
Project Online	Enables project management and collaboration. Available as an add-on for Microsoft 365 E3 and E5.
Stream	Provides secure video sharing and management. Available as an add-on for Microsoft 365 E3 and E5.
Visio Online Plan 2	Enables users to create and share professional diagrams. Available as an add-on for Microsoft 365 E3 and E5.
Yammer Enterprise	Provides social networking and collaboration features for organizations. Available as an add-on for Microsoft 365 E3 and E5.

Other Notable Add-Ons:

• Microsoft 365 E5 Security: By adding the Microsoft 365 E5 Security suite to your existing E3 solution, you can further strengthen your organization’s security posture. This robust suite offers advanced threat protection, intelligent security analytics, and integrated security management features that help defend against cyber threats and safeguard sensitive information.
• Microsoft 365 E5 Compliance: Microsoft 365 E5 Compliance provides tools to help your organization assess compliance risks, govern and protect sensitive data, and respond to regulatory requirements. This add-on service enables businesses to proactively manage their compliance landscape and streamline the process of meeting legal and regulatory obligations.
• Microsoft Syntex: Microsoft Syntex is an add-on that leverages advanced AI and machine teaching to amplify human expertise, automate content processing, and transform content into knowledge. With Microsoft Syntex, your organization can efficiently manage and process large amounts of data while gaining valuable insights from it.
• Microsoft Viva Topics: Microsoft Viva Topics uses AI-driven content organization and discovery to facilitate information access and knowledge management within your organization. By enabling seamless content discovery, employees can easily locate and leverage relevant information to drive productivity and innovation.
• Windows 365: Windows 365 is a cloud-based service that allows users to securely stream their Windows experience, including apps, content, and settings, from the Microsoft cloud to any device. This add-on service provides enhanced flexibility and accessibility, allowing employees to work from anywhere with an internet connection.
• Microsoft Viva Insights (manager and leader insights): Microsoft Viva Insights provides data-driven insights into work patterns, employee wellbeing, and business outcomes, while maintaining privacy safeguards for individuals. Managers and leaders can leverage these insights to make informed decisions and optimize organizational productivity and wellbeing.
• Microsoft Viva Learning: Microsoft Viva Learning seamlessly integrates access to learning content into the tools and platforms employees already use daily. This add-on service promotes continuous learning and development by making educational resources readily available, supporting employee growth and skills development.
• Microsoft Priva Privacy Risk Management: Microsoft Priva Privacy Risk Management helps organizations identify and protect against privacy risks, as well as automate and manage subject requests at scale. This add-on service simplifies privacy risk management and enables businesses to efficiently comply with data protection regulations.

Evaluating Your Needs

To make the right choice between Microsoft 365 E3 and E5, it’s essential to assess your organization’s unique needs and challenges.

Assessing your organization’s size and complexity

Larger organizations or those with complex operational structures may benefit from the advanced features and tools in the E5 plan. However, smaller organizations or those with a more straightforward operational setup might find that the E3 plan meets their needs sufficiently.

Understanding your security requirements

Take a close look at your organization’s security requirements and determine if the basic security features in E3 are sufficient or if you need the advanced security and compliance tools offered in E5. Industries with strict compliance regulations, such as healthcare, finance, or government, may find the E5 plan better suited to their needs.

Considering your budget constraints

Lastly, consider your organization’s budget and the cost-benefit of upgrading from E3 to E5. While E5 offers additional features and tools, it also comes at a higher price point. Weigh the potential benefits against the costs to determine if the investment in E5 is justified.

Key takeaway:

• Evaluating your organization’s needs, security requirements, and budget constraints is crucial for making an informed decision between E3 and E5.

Unlock Your Potential with the Right Plan

Choosing the right Microsoft 365 plan is essential for your organization’s success. By evaluating the features, pricing, deployment, migration, and real-life use cases of E3 and E5, you can make an informed decision that aligns with your unique needs and challenges.

Taking the next steps

Once you’ve made a decision, follow the deployment and migration steps outlined above to ensure a smooth transition to your chosen plan. Provide your users with the necessary training and support to maximize the benefits of your new Microsoft 365 subscription and unlock your organization’s full potential.